The Chinese yuan has now become the fifth most traded currency in terms of global foreign exchange turnover, with a market share of seven percent, according to a report issued by the Bank of International Settlements (BIS) on Friday. The new ranking of Chinese yuan was up from the eighth place in the 2019 survey, underscoring the attractiveness of the Chinese currency amid a push for global de-dollarization and a global investors' consensus on the bright prospects of the world's second-largest economy.
According to the report which titled "triennial central bank survey of foreign exchange and over-the-counter (OTC) derivatives markets in 2022," trading in OTC FX markets reached $7.5 trillion per day in April 2022, up 14% from $6.6 trillion three years earlier, setting a new record high. The data collection coincided with "heightened FX volatility due to changing expectations about the path of future interest rates in major advanced economies, rising commodity prices and geopolitical tensions" following the Russia-Ukraine conflicts.
Among which, the Chinese yuan exhibited the biggest increase in market share since the 2019 survey, being on one side of 7% of all trades in 2022, up from 4% in 2019. The US dollar remains the world's most used trading currency, with an 88% market share, unchanged from the previous survey. Euros continued to be the world's second most traded currency, with a share of 30.5%, down from 32% in 2019. The Japanese yen and pounds were ranked third and fourth with a share of 17% and 13 percent of all trades, respectively, virtually unchanged since the 2019 survey.
